Spring is a period of intense work for farmers. It is often from these few months that it depends on what crop it will receive, and what is connected with it, what profits will be obtained from its activity. And these profits are very difficult to estimate, because they depend on many factors on which farmers do not have direct influence. It is difficult to predict what the weather will be in the harvest season or what will be the price of their products in a few months. Therefore, we can say that agricultural activity is certainly encumbered with considerable risk, which certainly affects many situations. One of them may be mortgages for farmers.
Can a farmer apply for it?
Banks always look at credit applications submitted by farmers with great caution. Especially when it comes to mortgages, when you borrow large amounts and pay them for a long time. Some of them do not want to credit farmers, thinking that it is too risky for them. But fortunately, many banks credit farmers, although their applications are considered with great caution and accuracy.
At the beginning, we must say that it is quite difficult for a farmer to document income. He can not provide the bank with a certificate of earned income or a retirement section. Banks will demand completely different documents from him. This may be a certificate from the Commune Office, the area of the farm, payment order of the agricultural tax, invoices and bills from the last 12 months, the decision on granting subsidies from national or European Union funds, the history of the bank account, tax office decision on the amount of tax, etc. Banks they often require a farmer’s statement in which he calculates the planned income in the following years. Of course, these are theoretical calculations, because it is difficult to estimate the amount of income. Once the bank has the documents to calculate the farmer’s profits, he must calculate his creditworthiness. Here, the same indicators are usually used as for other clients. Credit history accumulated in the Credit Information Bureau is also extremely important here. If the farmer does not have it or it is weak, it can forget about the mortgage loan.
The loan security will also play a significant role in the mortgage loan for the farmer. Because farmers’ incomes are risky, banks may require a slightly greater security from them than those employed on a full-time basis. It may, therefore, be an additional guarantor or pledge on an agricultural vehicle.
As you can see, farmers have a slightly more complicated procedure in connection with applying for a mortgage, however it is possible to get it. Therefore, if you are running an agricultural activity and want to obtain such a loan, browse the offers of banks and you will surely find one that will enable you to buy or build real estate.